Traditional remote payment transactions (e.g., card not present transactions) suffer from a number of problems. Before conducting a remote transaction, a consumer may have to provide payment card details such as an account number and identification information to identify consumer over a remote channel such that the consumer can be authenticated. In most cases, issuers may need to devote substantial resources for development and integration work or have transaction limits imposed in order to control risks. For example, the issuers may need to devote resources to provide authentication services to verify the identity of the consumer, which may add to transaction processing delays as well as costs.
Mobile wallet solutions for conducting remote transactions are also gaining popularity. Another problem associated with the remote transactions is the payment liability faced by the mobile wallet providers. Current wallet provider solutions do not have a way to validate a payment account and authenticate the consumer for a remote transaction. As a result, wallet providers have to bear the cost of unauthorized transactions resulting in loss of revenues.
Embodiments of the invention address these and other problems, individually and collectively.